Q2 2018 August 17, 2018
Presenters Lothar Geilen Linus Brandt CEO CFO & Executive Vice President Another strong quarter with substantial growth across all businesses 2
Opus today Opus is a global leader in vehicle inspection, as well as a provider to the growing intelligent vehicle support market Geographical footprint • Active in 10 countries – 5 continents UK • Headquartered in Gothenburg Sweden US Spain Mexico • Pakistan Approximately 2,400 employees Peru Australia Chile • Listed on Nasdaq Stockholm Argentina Financial targets LTM (1) Revenue: 258 MUSD • LTM (1) EBITDA margin: 18% • PERCENT MILLION USD TIMES • Net Debt / EBITDA (2) : 3.5x EBITDA margin by 2021 Net debt / EBITDA Revenue by 2021 not to exceed 3.0x (3) (1) Last twelve months: July 1, 2017 – June 30, 2018 (2) LTM EBITDA adjusted for proforma accounts of acquired businesses 3 (3) Net debt may exceed 3x EBITDA temporarily, for example if an investment opportunity arises, or if expected EBITDA from new projects will only materialize in a later period
Substantial growth and good margin development HIGHLIGHTS Q2 2018 Net Sales (MSEK) • Net sales grew by 37% to SEK 651 million. The growth 651 was supported by acquisitions and good organic 555 496 growth of 12% 475 458 452 429 430 419 395 • EBITDA improved by 58% to SEK 142 million, corresponding to an EBITDA margin of 22% (19%) • Despite strong operating profit, currency losses Quarter 1 Quarter 2 Quarter 3 Quarter 4 (primary in Argentina) and significant one-off items resulted in negative net income EBITDA (MSEK) 142 • A new senior unsecured bond loan of 500 MSEK has 116 100 been issued to secure financing for continued growth 90 87 84 72 68 62 61 • The acquired VTV companies are generating profits in Argentina and contribute to a stronger organization in Latin America Quarter 1 Quarter 2 Quarter 3 Quarter 4 2018 2017 2016 4
Financial overview OPUS GROUP 3 MONTHS 6 MONTHS 12 MONTHS LTM (1) Q2 2018 Q2 2017 YTD 2018 YTD 2017 2017 MSEK Net sales 651 475 1,206 904 2,160 1,858 EBITDA 142 90 243 162 389 308 22% 19% 20% 18% 18% 17% EBITDA margin (%) EBITA 108 60 177 102 264 188 EBITA margin (%) 17% 13% 15% 11% 12% 10% -27 28 -17 37 21 74 Net Earnings EPS (SEK) (2) -0.05 0.10 0.00 0.13 0.00 0.27 Operating Cash Flow 111 32 151 83 253 186 Free Cash Flow (3) 44 -22 30 -12 1 -41 Net Debt 1,633 884 1,633 884 1,633 966 Net Debt / EBITDA (x) (4) 3.5x 2.6x 3.5x 2.6x 3.5x 3.0x 1,030 936 1,030 936 1,030 947 Equity Equity / Asset ratio (%) 26% 30% 26% 30% 26% 28% (1) Last twelve months: July 1, 2017 – June 30, 2018 (2) Profit/loss for the period attributable to parent company shareholders divided by the average number of outstanding shares after dilution (3) Cash flow from operating activities minus investments in fixed assets (4) LTM EBITDA adjusted for proforma accounts of acquired businesses 5
Net income impacted by currency and one-off items CURRENCY LOSSES ONE-OFF ITEMS • Unrealized foreign exchange rate losses, mainly in • In addition to the currency losses, net income has Argentina, amounted to -48 MSEK (-8) in Q2 2018 also been negatively impacted by other one-off and -54 MSEK (-9) in H1 2018 items • The purchase price allocation for the acquisition of • The Argentine peso (ARS) has dropped significantly in value against the USD during Q2 2018 Gordon-Darby was finalized in Q2. Amortization of 11 MSEK related to Q1 has been booked in Q2 • Due to the fact that Opus primarily lends in USD to its subsidiaries, exchange rate losses have • A premium of 6 MSEK was paid in connection with occurred in the Argentinian subsidiaries on such the early repayment of the November 2018 bond loans • The reported income tax includes a negative tax • As the interest rate on (external) ARS loans is very effect of 17 MSEK relating to exchange rate gains high, funding the Argentinian subsidiaries with intra- (USD vs SEK) not recognized as income but group USD loans is beneficial to Opus reported against equity 6
Secured financing for continued growth DEBT MATURITY PROFILE (MSEK) (1) ISSUED A NEW 500 MSEK BOND • A new senior unsecured bond loan of 500 MSEK 600 538 has been issued 500 500 500 448 • Framework amount of 800 MSEK 400 • The bonds carry a floating rate coupon of 300 STIBOR 3m + 375 basis points 200 • Tenor of four years - redemption in May 2022 100 0 • The proceeds were used to redeem all outstanding 2018 2019 2020 2021 2022 2023 2032 bonds on the 500 MSEK bond loan due to expire in November 2018 Bond 2016/2021 (SEK) Bond 2018/2022 (SEK) Credit Facility 2017/2023 (USD) L/C backed bonds 2017/2032 (USD) (1) The USD denoted Credit Facility and L/C backed bonds are exchanged to SEK with an USD/SEK Fx-rate of 8.96 7
Historical development LTM NET SALES & EBITDA MARGIN 2500 25% 2000 20% 1500 15% 1000 10% 500 5% 0 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 LTM Net Sales (MSEK) LTM EBITDA margin (%) 8
Good development in both divisions INTELLIGENT VEHICLE INSPECTION VEHICLE SUPPORT DIVISIONS MSEK Q2 2018 Q2 2017 Q2 2018 Q2 2017 Net sales 587 454 71 24 138 95 11 1 EBITDA EBITDA margin (%) 23% 21% 15% 4% EBITA 105 65 9 0 EBITA margin (%) 18% 14% 13% 0% Net sales Q2 – Split by division • Strong growth of 29% • Strong growth of 196% • Organic growth of 11% • Organic growth of 39% 11% • Increased margins • Increased margins • Strong performance driven by • Strong performance driven by 89% the acquisition of Gordon- the acquisition of Autologic Darby and higher EaaS and higher equipment sales volumes by Drew Technologies Vehicle Inspection Intelligent Vehicle Support 9
Strong growth across all segments VI US & ASIA VI EUROPE SEGMENTS VI LATIN AMERICA MSEK Q2 2018 Q2 2017 Q2 2018 Q2 2017 Q2 2018 Q2 2017 Net sales 389 271 188 176 17 13 101 63 44 38 -7 -7 EBITDA EBITDA margin (%) 26% 23% 23% 22% -42% -55% EBITA 74 38 39 34 -9 -7 19% 14% 21% 19% -51% -56% EBITA margin (%) • Total growth of 44% • Growth of 7% • Total growth of 36% Net sales Q2 – Split by segment 3% • Organic growth of 15% • Higher margins • Organic growth of 9% • Increased margins • Higher volumes and • Negative margins increased average • Positive contribution • Most programs are in revenue per inspection 32% by Gordon-Darby a development phase • Strong market share • Higher equipment • The acquired VTV 65% development on a sales and EaaS companies will slightly weaker total volumes contribute positively to market the segment’s overall • Pakistan: 7 stations EBITDA operational end of Q2 VI US & Asia VI Europe VI Latin America 10
Acquisition of VTV • Opus acquired 100% of the shares in the two Argentinian vehicle inspection companies VTV Norte SA and VTV Metropolitana SA (together “VTV”) in May 2018 • Concessions in the province and city of Buenos Aires • Purchase price of 11 MEUR (~110 MSEK) on a cash and debt-free basis • Generated full year revenues of approximately 10 MEUR in 2017 • In accordance with other concession agreements in Argentina, VTV is entitled to an annual fee increase matching inflation • VTV improves Opus’ foothold in Argentina and contributes to a stronger organization in Latin America • The acquisition is developing well and will contribute positively to the VI Latin America’s revenue growth and EBITDA development • Long-term we see a good potential in the Argentinian market with increasing vehicle population and improving compliance rate 11
Continued growth in emission test equipment EaaS EAAS 12 MONTH RUN RATE (MUSD) 35 3.5 30 30 3.0 23 25 2.5 22 20 20 2.0 18 16 1.5 15 13 10 1.0 5 0.5 0 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 12
New website launched Please visit us on www.opus.global 13
Another strong quarter SUMMARY Q2 2018 • Substantial growth and good margin development • Positive development driven by acquisitions, expansion of EaaS, growth in IVS and higher market share in Sweden • Acquisition of VTV strengthens position in Latin America • Net income negatively impacted by currency and one-off items • Secured financing for continued growth • We will continue to focus on: Timely implementation of various programs under development Delivering good operating profit margins Developing market leading technologies and continuing to innovate Evaluating opportunities to continue to grow our business 14
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